The ‘servicelization’ of societies: towards new paradigms in work organization

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de Almeida, P. P. (2005). The ‘servicelization’ of societies: towards new paradigms in work organization. Portuguese Journal of Social Science. 4 (2), 63-79

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towards new paradigms in work organization

Paulo Pereira de Almeida ABSTRACT

This essay proposes an alternative to the theoretical framework for the approaches to phenomena of the servicelization of work in complex organizational contexts. In contradiction to the models which question the industrialization processes, theoretical paradigms are presented which highlight integration in the analyses of new concepts of work, such as co-production, the supremacy of the client/user, the evaluation of organizational performances and competence logic. Finally, a model of the service enterprise is presented with its alternative configurations in a proposal for empirical application, some or which is now being carried out in Portugal.

ABOUT THE AUTHOR

Paulo Pereira de Almeida is graduated in Sociology and has a PhD on Sociology (ISCTE – Higher Institute for Buisiness and Labor Studies). He is Assistant Professor at ISCTE, in Lisbon, and a researcher at CIES and DINÂMIA (both at ISCTE). His main interest areas include technological change and the labor process, workplace organization new forms of production and enterprise organization, skills and competences, employment and labor markets, and governance.

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1.

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We propose using “servicelization” as an alternative concept to that of “tertiarization”. On one hand this highlights the distinction from the “industrialization” concept and, on the other hand, it draws attention to the transversal phenomenon of the “service logic” in the organization of a considerable, and growing, number of contemporary work activities. We make the distinction between the “service” concept and the “services” concept, linking ”services” to the classification of economic activities (and, as we shall argue, of a strictly economic nature) and, simultaneously, defend the postulate that the “service” runs through most forms of contemporary work. In fact, and in response to the emergent rise in service consumption, we believe it is plausible to discuss the emergence of what is considered to be an ideal service enterprise model. This thesis also intends to show clearly that the “service logic” concept has three main characteristics, namely:

- the structuring of the service enterprise so as to strengthen the construction of the set of relevant and updated information on client-users, which should then be mobilized to identify their specificities;

- the organization of work activities so that they contribute to the co-production of answers adapted to the clients’ “problems”; and

- pressure to reconstruct production technologies and relational logistics in service co-production processes and with the self-teaching of competences.

Two observations are currently made from the supply perspective. The services in rapid expansion are the ones with a relational character, backed by verbal interaction and direct contact between producers and consumers. On the whole, these are professional services (that is, supplied by those with specialized knowledge, recognized through diplomas or other kinds

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of public certification as in health or education for example). But this level of professionalization is not found in a significant proportion of services (e.g. catering, or over-the-counter servicesi_{) and they require different kinds of competence to develop this}

relationship of interaction.

Similar explanations are considered controversial by many. If we turn to Gadrey, one of the main authors on the study of tertiarization, we find he believes a more in-depth analysis is required (Gadrey and Zarifian, 2002: 65-66). On this premise, the author stresses that in advanced societies it is the services with a relative decline in the number of jobs which have a lower relational component, backed by operations consisting mainly of handling goods rather than direct contact with the clients (e.g. transport, logistics, wholesalers), or the handling of large volumes of codified information (such as in telecommunications, or traditional banking services for the administration of dossiers or checks etc). He argues that these kinds of service are more susceptible to being “industrialized” i.e. where industrialization is a process backed by standardized procedures and results and by the mechanization of operations necessary for their production. It is precisely this limitation on the explanations of the tertiarization of societies that led Gadrey to considering other alternatives. He argues that the most developed countries have two groups of services which can be analyzed distinctly – in terms of the evolution of employment (Gadrey and Zarifian, 2002: 64-65):

- on one hand, a group of services which includes “distribution”, “transport”, “telecommunications”, “banking” and “insurance” (services with a relatively small relational component) and where there has been limited or no growth of employment or even the beginnings of a decline in some cases;

- on the other hand, a group of services which covers “health”, “education”, “consultancy”, or “catering” (services where the relational and professional

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components are quite significant) and where the volume of employment has risen considerably.

In an attempt to go beyond the observations on the effects of servicelization on work, it is our opinion that Zarifian’s position is an epistemological breach. The author calls on and questions the social construction assumptions of the production sector and of the social division of work: in other words, he considers its limitations as an explanation for the new realities linked to the act of working or, strictly speaking, the act of producing. He also argues that the notion of service corresponds to modern work, regardless of the sector (Gadrey and Zarifian, 2002; Zarifian, 1999a). According to his argument, working would mean “creating a service”, that is, a modification considered positive in the living conditions of individuals and organizations (the recipients of the service). Literally, the statement that work consists of “creating a service” for the recipient, assumes the particularity of making the notions of “client” or “user” concrete. And, in fact, if we are to define the clients (practically and reflectively) it is essential to consider the “product” as a service rendered to specific recipients, with a range of problems and concrete applications which the clients may make of the products as such, and to which the organizations try to respond in the context of their structure (Zarifian, 1999a: 112). Another aspect must be added to these dynamics of the transversal nature of the service: in the context of advanced societies in the XXI century, individuals own an increasingly small amount of assets and this has contributed to the idea that property has been transformed into an unreal concept (Rifkin, 2000: 235 and ss). With ever-shorter productive life cycles, together with the growth in the number and kind of available goods, a fundamental change has taken place: tertiary societies are characterized by a generalization of the service and in Rifkin’s thesis capitalism tends to become a system in which the exchange of goods is replaced by the exchange of access to “segments of experience” (Rifkin, 2000: 77-95).

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In our opinion, it is important to note that the way most work is done in services contrasts strongly with that of industrial models. Even though there are some common factors, the speed of the operations (which legitimates the exploitation of the qualities of the systems and machines) does not keep up with the demands for initiative, for practical intelligence, communication with colleagues, dialogue with clients (which is the basis of most activities of contemporary human work). Furthermore, it is argued that the tertiarization of economic activities modifies the kind of competences required by workers and it is possible to link this “service logic” to a specific centrality of the “competence model” (Gadrey and Zarifian, 2002: 121-132; Lopes et alli, 2000: 32-36). From Zarifian’s perspective, what is called the notion of competence is a new unit between the work and the worker; the work in this unit reincorporates the individual and an attempt is made to mobilize and extend the knowledge and imaginative intelligence possessed or co-constructed by this individual (Zarifian, 1999a)ii_{; his argument}

recreates the stages of work in the service enterprises which begin with a phase of knowledge (recognition) and interpretation of the client’s needs, and conclude with the effective production of a service (Gadrey and Zarifian, 2002: 131 and ss).

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It is relevant to consider that in the current phase of societies the development of services represents the transfer from an industrial model to a different model i.e. to a set of different means or ways to produce. In an “industrial economy” the producer’s relationship with the users implies the break down of the products into normalized, primary elements which are accepted or rejected (i.e. bought or not bought) by the clientele; we can even speak of a “configuration of users”iii_{. In the case of the “economy of services”, the service-products are}

global and generally cannot be broken down, and therefore the client/user’s evaluation is based on his satisfaction with consumption and he can even intervene in its production. Some of these

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service-products (namely informational services) only come into existence precisely when there is a service relationship with the client and therefore, in these cases, we speak of “co-production” (De Bandt, 1994: 333-335; De Bandt, 1999: 1-17; Burnier, 1999: 77-91).

The emergence of a model of “competition-relational management” is found to run alongside the growing servicelization processes of human work activities in advanced societies. This model can correspond to services in which there is a relatively small relational component, but it covers above all the services where clearly “relational” elements of “face-to-face interaction” are found. In fact and given the concentration and integration of the technical systems in the large service enterprises, their branches are placed between two potentially conflicting logics: between a movement with the concentration of powerful technical-information systems which can attract an increasingly large number of clients, and a need to have deeper relations and closer and more direct contacts with the clientele.

However, we know that during the phases of intense organizational change, the standardization of service enterprises has come closer to an industrial logic: joint phenomena were produced of economic concentration, the implementation of technical systems which tried to simplify obtaining economies of scale, and the reduction of the amount of individualized interaction with the client (with the service “rendered” becoming self-service) to which the conception of “near-products” can be added in certain cases (standardized products corresponding to a limited range of non-human interventions). Meanwhile, the need “to adapt to a service logic” where to a certain extent the supremacy of the client/user and the co-production of the service rules, justifies the recurring use of the notion of “competence”, as a management resource which brings the enterprise closer to the client. Furthermore, this trend seems to result from intra-sectoral dynamics and some compatibility between the expectations of the workers and the proposals of the human resources management.

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To a certain extent, the use of the notion of competence is still a consequence of plea for sectoral negotiation. Just as workers want to negotiate the essential of salaries at enterprise level, they also want to discuss qualifications (or more precisely, competences) at this level. In this field there is also a polarization between the interprofessional level and the enterprise level (to the detriment of sectoral negotiation); this phenomenon seems to result from a certain “internalization of the qualification” (Lichtenberger and Paradeise, 2001; Reynaud, 2001), that is, the fact that the labor market is increasingly evaluated at the level of the enterprise and its human resources management practices. The set of “qualities” of the workers in jobs where the relational component predominates started including areas previously reserved to middle management, like for example “client service” and “commercial competence” between 1980 and 1990; on the other hand, the management started being able to manipulate information systems, the same procedures and the same products used by the other workers.

In addition, the commercial relationship – and more specifically the contact between the salesman and the client – is one of the difficult issues which has emerged with the service enterprise model and with its logic of competition-relational management. Similar structural and management transformations imply a great change in the management control procedures and the commercialization practices, particularly in the conception of the client-enterprise relationship: this is now seen as dynamic and individualized. The idea has therefore been spread that increasingly the products are not “bought” by the clientele but rather “sold” by the enterprises, which implies an increase of commercial productivity. How? It is considered true that the rise of productivity levels has involved a segmentation of the clientele and this is the result of the restructuring of the commercial services and the human resources development programs which accentuate the relational dimension and the mobilization of a set of

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competences; this phenomenon is obviously felt most acutely in the medium and large enterprises.

3.

T

Given that productivity is a typically Fordist concept which is adapted above all to analyzing the performance of standardized production systems, where production is also relatively standardized, it cannot be readily applied to the production of goods and, in particular, services where this standardization is limited. For example, the question about the “real production” of service enterprises – as in the example of banks – becomes particularly relevant with this regard. In this context, there is a legitimate opposition between the volume of transactions made by the bank for their clients (the direct or immediate product), irrespective of the possible effects of this consumption, and the added bank value (the indirect result or mediate product), which would be the indicator of the effects produced by the services. These assertions also lead to the issue of the so-called “industrial tertiary sector”. Here, we can debate whether there is a fundamental similarity, or, on the contrary, if there are irrefutable differences between industrial production and the production of services.

From the outset – and on the issue of the kinds of convergence between industry and services –, the question may be approached more from the perspective of the intensity of the relations and interactions between the actors in supply and demand, as opposed to from that of drawing of an airtight border of frequently unspecified shapes. The diagnosis which suggests we are in a post-industrial society may be contradicted by arguing that this could be called a neo-industrial society because the “industrialization” phenomenon of some less qualified services emerges, principally in the payroll of certain service enterprises, organized from an industrial perspective and with a dual segment, to produce and sell relatively standardized

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“service-products” on a large scale. The organization of retailing and distribution or mail ordering, the MacDonalds restaurant chain or work at the check-out of hypermarkets are concrete examples of this trend (De Bandt and Gadrey, 1994: 11-17; Gadrey, 1990: 25 and 26 ; Lopes et alli, 2000: 32-36).

More conceptually, we can refer to a service enterprise model which – understood as the ideal-type and extracted from its connections with other models – could be characterized by three essential principles, according to the proposal by the same author (Gadrey, and Zarifian, 2002: 41 and 42). Firstly, this is a model where three universes are articulated (figure 2)iv_{: the}

universe of the conception of the services which includes research and development activities; the universe of the technical-administrative infrastructure which supports the production of its services, understood to be the back-office; and the universe of the contact with the client-user, understood as the front-office. The cooperation-coordination between these three universes is vital to ensure the working of the chains of activity which cross them, as this separation tends to contradict the functional division of work proclaimed by Fayol, as well as the traditional conception of the management control function. In the second principle, the service enterprise model is governed by a specific effectiveness plan: it begins with the symbolic and virtual definition of the transformation operating in the activity conditions and in the availability for the action of a client (or of a specific category of clientele) and ends with the effective completion of the transformation. It should be stressed that the income generated for the organization (i.e. its performance) is determined according to how the clientele evaluates (judges) the services, in relation to the supply from the competitors or the other alternative options. This service enterprise model also presupposes – and this is the third principle – an organization that works as a network or as a chain of activities. In this kind of enterprise there is a permanent relationship and a dialogue among the different professionals in each of the

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three universes of service production (these universes assure their reciprocal acceptance through social contact or through sharing technology).

Throughout this work we have chosen to examine the issue of the dissemination of a “service logic” in contemporary work activities. Objectively, it becomes somewhat complex to envisage all aspects of this matter and therefore focus is given to defining and characterizing the service enterprise. The alternative definition we propose includes – by conceptual extension – enterprises in which a “service-products” component is added to work activities. It is our understanding that the “structural protagonism” of the commercial and marketing functions, the segmentation of the clientele and the decentralization of workers’ responsibilities are crucial aspects for their organization. In our thesis, these characteristics can be observed when services are being developed in which – with automatized simpler or less interactive parts – individualized sales are sought, and where there is significant advisory component. It is therefore noted that these structure principles can be extended to other organization forms of work activities, namely the (public or private) enterprises and organizations which are directed towards an active and in certain contexts demanding clientele. Numerous examples could be given here ranging from insurance, information and telecommunications enterprises to automobile production and service industries or even public bodies. Next, we understand that the configuration and choices of how to run the service enterprise are embodied in two categories of function which are interconnected and have sectorally differentiated configurations:

- the (back office) “instrumental-industrial functions” which ensure instrumental support upstream; and

- the (front office) “relational-service functions” which ensure that the creation/rendering of the service takes place downstream.

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Furthermore, and if we consider work in these organizations as a dual framework (and in some cases with the dual constraints) of the service logic and the local (and/or socially disseminated) applications of the competence model, we understand that these to some extent imply that certain kinds of competence (e.g. type “x”, type “y” and type “z”, in figure 2), necessary for work activities involving the sale of “service-products” in their technical and material/immaterial characteristics, are transversal.

Production of a space for interaction and co-construction between human resources management practices and the definition of work and of service competences

Worker 1 Service enterprise model Performance measurements of human resources Competence model Back office of the service enterprise Front office of the service enterprise Type X competences X 1 X2 . . X N Type Y competences Y1 Y2 . . YN Worker 2 Service-products and their technical and material/ immaterial characteristics Type Z competences Z1 Z2 . . ZN

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Bearing in mind the phenomena of transformation and “co-production” which exist in the rendering of a service, we should then not forget that the latter is found in the framework of the time period when this service is rendered. This time period is crucial for the evaluation of service quality and - considering the existing agreements and forms of performance evaluation – there can be no neglecting the tension found in this specific point. This highlights the hesitation of enterprises (in particular) and organizations (in general) between rendering a quality service, or obtaining profits at any price subjecting themselves to the arguments of productivist guidelines.

As we have discussed, service relations were changing throughout the XX century: in terms of the operational interactions, certain kinds of interaction (often the simplest, most likely to be automatized) have decreased, whilst other kinds of interaction (generally the most complex in relation to cognitive devices) have increased, often simultaneously. It is precisely at this level that, in our opinion, the service enterprise is presented as a conceptually stimulating proposed paradigm.

i _{Including the traditional “counter” in a bank and, more generally front office workers characterized by}

routine work where “paradoxical Taylorism” predominates” (Veltz, 2000), that is, where personalized interaction with the client is accompanied by the need to maintain standardized routines.

ii _{The vision of an autonomous individual and one who is freed by work and by the freedom of choice in}

his professional trajectory (i.e. by a career made by the development of his competences, free of heteronomic constraints) is criticized by some authors. Gorz, for example, considers Zarifian’s thesis on this as “theoretical delirium” (Gorz, 1997: 72) because cultural, political and moral autonomy- the crux and fundamentals of which are far from the act of work, which in itself is subject to mediations and constraints of this kind- should be proposed in contrast to the idea of autonomy and self-determination at work.

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iii _{We use here the expression of Grint and Woolgar which we consider appropriate to say how the new}

technologies impose a way of relating to their users, presupposing a minimum of socially validated technical knowledge (Grint and Woolgar, 1997: 65-94).

iv _{On the concept of the “production universes” and with development, Veltz characterizes the appearance}

of a “new universe of industrial production”, marked by new forms of innovation, production, work and exchange, where the emerging values of autonomy, the limitation of involvement, and a kind of modern individualism increasingly distance the productivity concept of traditional effectiveness plans (Veltz, 2000). Also on this, Sennett refers to the indifference in relation to productive involvement which, according to the author, marks contemporary ethics in capitalist work (Sennett, 2001).

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